Case Analysis of Eastman Kodak's

Quest for a Digital Future

Submitted by:

Renz Charles Tenebro

Ian Japril Baquial
Jaharra Caracot

HR411: 11:00-12:00

Submitted to: Prof. Eva-marie Sam

 Case Summary
George Eastman transformed photography from a professional studio-based
activity into an everyday consumer hobby. His key innovations were silver halide
roll film and the first fully portable camera. The Eastman Kodak Company
established in Rochester, New York in 1901 offered a full range of products and
services for the amateur photographer: “You push the button, we do the rest” was
its first advertising slogan. By the time George Eastman died in 1932, Eastman
Kodak was one of the world’s leading multinational corporations with production,
distribution, and processing facilities throughout the world and with one of the
world’s most recognizable brand names. After the Second World War, Kodak
entered a new growth phase with an expanding core business and diversification
into chemicals (its subsidiary, Eastman Chemical, exploited its polymer
technology) and healthcare (Eastman Pharmaceutical was established in 1986).
Kodak also faced major competitive challenges. In cameras, Kodak’s leadership
was undermined by the rise of the Japanese camera industry; in film, Fuji Photo
Film Company embarked on a strategy of aggressive international expansion. In
addition, new imaging technologies were emerging: Polaroid pioneered instant
photography; Xerox led the new field of electrostatic plain paper copying; while the
advent of the personal computer ushered in new image management and printing
technologies.

I. Viewpoint

 CEO/Chairman

II. Statement of the Problem

The main problem for Eastman Kodak was the transformation to digital imaging
with the growing trend for consumers to view their photographs on screen rather
than in printed form. The lack of market research and their slow entering in the
digital photography scene. It had invested heavily in building digital capabilities
and launching new products, but it failed miserably to generate income. Kodak
acted like a stereotypical change resistant Japanese firm, while Fuji film acted like
a flexible American one. Posing the main question of what the future holds for
Eastman Kodak until they declared bankruptcy.
III. SWOT Analysis

 Strengths
- Eastman Kodak’s strengths help distinguish what competitive advantages it has
over other competitors within its industry. The main strength the company has is
its strong brand name. Even at Eastman Kodak’s weakened state, they are still
ranked in the top 100 for the most valuable US brand name. Next, their vast
distribution system is unrivalled in its industry, but the declining demand for printed
images can depreciate the asset that once was unrivalled. Kodak also has a strong
R&D by focusing on technology. Its research efforts in imaging brings a lot of
capabilities that Eastman Kodak could capitalize. Lastly, their portfolio of
acquisitions and strategic alliances or joint ventures provided balance sheet
strength that meant it was still one of the strongest firms financially in the industry.

 Weaknesses
- Eastman Kodak’s weaknesses was its decision to transform its capability base
from chemical to digital imaging. This ended up being a major weakness for
Eastman Kodak because it required CEO George Fisher to launch a major hiring
campaign to put in place the executives and specialists required for its new digital
strategy. A major problem with the transformation was that Kodak was entering a
new chain of digital imaging that already included well-established companies.
Another weakness was its emphasis on printed images, Perez’s major investment
to build Kodak’s presence in the market for consumer inkjet printers. This was most
widely criticized of all of Kodak’s digital imaging initiatives because it was trying to
establish itself in a very mature, intense competitive market, and by 2011, Eastman
Kodak held only 6% of the US market compared to Hewlett-Packard’s 60% market
share. Lastly, the switch from photography film to digital photos was a questionable
decision because they are now placed in a highly competitive and mature market.
The main comparison we can see is by comparing Kodak with Fuji film. Like
Eastman Kodak, Fuji film made major changes to adapt to the emerging markets.
Unlike Eastman Kodak, Fuji film was very successful with its diversity and enabled
it to make selective acquisitions and its technical capabilities resulted in several
discoveries.
  Opportunities
- Eastman Kodak’s opportunities provide insight for what it should do for the future
in order to become competitive once again and bounce back from their poor
financial performances. Opportunities such as continuing research for new
technologies can help Eastman Kodak gain a competitive advantage over rivals in
the industry. It can help the company better meet their customers’ needs and
improve new products allowing them to diversify. Another opportunity would be for
the company to tap into new emerging markets such as Brazil and India.

 Threats
- Eastman Kodak’s Threats and the rest of the industry is to fail and have poor
financial performances. In times of recession or poor economic times can cause a
reduction in customers and decrease sales and revenues. Another threat is the
intense competition because rivals within the industry can offer superior products
that could attract customers away from Eastman Kodak. Substitute products such
as the new smartphones can hurt the company from gaining sales and revenues.
Because smartphones are becoming more widely available and more enhanced,
people are able to capture quality images with the smartphone. Lastly, the
transition into digital imaging is a huge threat because they entered a market where
they did not strategize properly, and it drastically hurt their performance.

IV. Alternatives Courses of Actions

Alternative # 1

Focus on Eastman Kodak’s Planning System

 Advantages
- Kodak can map out its strategic development plan for its products and services in
order to be competitive amidst the dynamic ever-changing imaging industry. It also
weighs the long-term valuation of re-establishing its market demand and viability
of sales because it would mean investments on long-term assets.
 Disadvantages
- Time consuming to provide strategic development plan and briefing.
- Additional expenses to hire experts to plan a strategic development plan.
 Alternative # 2

Human Resource and Hiring Training

 Advantages
- It is important to establish relationship and professionalism among employees,
which help boost skills and competency when they decided to transform to digital
imaging. They must return to their original concept of treating their employees fairly
and with respect.

 Disadvantages
- Time consuming or failure to hire and train employees because of quickly
transforming from traditional to digital imaging.

Alternative # 3

Price Strategy

 Advantages
- If Kodak starts to compete on price, they run the risk of transforming the category
into a commodity. Therefore, it would be better to have a price strategy. As the
market leader, Kodak should not react desperately to movements of small
competitors, but it should protect its market. Kodak must align its interest with
those of the retailers Sell on brand’s equity and image promise consumers that
although they cannot see perfection, it exists. A company’s pricing strategy should
consider the impact on its brand equity.

 Disadvantages
- A Price Strategy in the market does not necessarily mean an increase in
profitability also it run the risk of managing the price of the product. One
miscalculation may lead to costumer’s dissatisfaction.
 V. Conclusion

In the changing world of technology, change is the only constant. The business
that lacks the capacity to embrace change cannot succeed in the competitive
world. Precedence shows that change and innovation in technology challenge the
success of the market leaders. Right strategy plays a critical role, and many
leaders lost their market leadership without it, Kodak based on an innovative idea
and product of that time, was a market leader in the film based photography
products. In 1975, the business invested and launched the first digital camera. The
business was the primary innovator of the digital technology with approximately
2.6 billion worth patients. After touching the new heights of success, the company
filed a bankruptcy suit in 2012. The assignment aims to analyze the Kodak’s digital
imaging strategy critically, the reason behind its failure, and identifying alternative
strategies. In the end, some logical and rational recommendations will be
presented to regain lost success in the future.

VI. Recommendation

Alternative # 1
Based on the choices of alternatives, the best way to answer the problem of Eastman
Kodak wound be Alternative #1 because Kodak can map out its strategic development
plan for its products and services in order to be competitive amidst the dynamic imaging
industry. It also weighs the long-term valuation of re-establishing its market demand and
viability of sales because it would mean investments on long-term assets although time
consuming and costly it is the best alternative to take. Strategic Planning is the only way
Kodak can fight their product becoming a commodity. In the changing world of technology,
change is the only constant. The business that lacks the capacity to plan and embrace
change cannot succeed in the competitive world.

VII. Implementation

1. Hire Specialist/Experts to carry out the Strategic Planning System.

2. Plan the Strategic Development for its products and services.
3. Implement and follow accordingly the planned strategy.
4. Evaluate the results and changes.